Solazyme ? a South San Francisco startup focused on producing oil from algae ? said Tuesday that it had produced the world?s first algal-derived jet fuel. Company officials said that their algal fuel had been tested by one of the nation?s leading fuel analysis laboratories and had passed eleven tests necessary for use in aviations.

There may not be peanuts and pretzels anymore on airplanes, but someday there may be algae oil.

Solazyme - a South San Francisco startup focused on producing oil from algae - said Tuesday that it had produced the world's first algal-derived jet fuel.

Company officials said that their algae-based fuel had been tested by one of the nation's leading fuel analysis laboratories and had passed eleven tests necessary for use in aviation.

"This is not like conventional biodiesel, where you can take french fry grease from McDonald's and turn it into oil in your garage," said Harrison Dillon, president and co-founder of the 50-person company. "Planes will fall out of the sky if you don't have a high-quality fuel that meets strict standards. ... What Solazyme has done is demonstrate the first-ever manufacture of high-quality jet fuel from algae."

Solazyme has been experimenting with different strains of algae since 2003 in an effort to develop renewable alternatives to petroleum for use in transportation, cosmetics, cooking and manufacturing.

The company genetically modifies algae from around the world to consume a wide range of feedstocks, such as wood chips, switchgrass and sawdust. When the algae consume more of these substances than they immediately need, they produce oil as an energy storage mechanism.

Last winter, Solazyme produced fuel that powered a Mercedes diesel car around the Sundance Film Festival.

Its initial output of jet fuel was a modest 5 to 10 gallons - just enough for lab testing.

But Dillon said that the potential output will only be limited by the availability of feedstock.

"You won't replace 100 percent of fuel with biofuel for a long time, but this is not something that is going to top out at half a percent of all jet fuel," he said. "It's got a lot of potential."

Dillon predicted that Solazyme will be able to bring production costs down to a point where its fuel will be competitive with $40- to $80-per-barrel oil in two or three years.

Before then, though, there is a lot more testing to do.

So visitors to this year's Sundance Film Festival are not likely to be able to fly there in an algae-fueled plane.

"There is a pretty stringent process for bringing new jet fuels to market," said Dillon. "I can't give you an exact date when we are going to fly a plane on this stuff, but we are in active conversations with oil companies as well as aviation companies."